Budget leaks: spending power up but “choices need to be made”

Spending power will go up by an average of 1.3% next year, according to a leaked version of the finance ministry statement ahead of Tuesday’s formal budget presentation.

The document, drawn up by finance minister Eelco Heinen, also suggests health insurance will rise by some €3 a month next year, the economy will grow by 1.6% this year and 1.4% next, and that inflation will fall back to 2.3%.

“The Dutch are happy with their lives,” broadcaster NOS quotes the minister’s preface as saying. “Never before were so many people in work. Spending power is rising, poverty has gone down and the national debt is low.”

Nevertheless, he wrote, international developments and the decline in the Netherlands’ popularity as a place to do business mean “choices will be needed to make sure we remain a prosperous and safe country”.

“We don’t appear to realise what is at stake,” he said. “Just as we don’t appear to realise we can turn this around. I am optimistic.”

Every year, the government’s spending plans for the following year are widely leaked ahead of the formal presentation on the third Tuesday in September.

According to RTL Nieuws, the caretaker administration is also set to reverse cuts to a schools’ programme aimed at boosting equal opportunities and increase spending on prisons.

Several key plans have already been leaked. The government is withdrawing its plan to bring back cheaper “red” diesel for farm vehicles and the 30% tax ruling for some international workers will be reduced.

The tax cut on fuel will be extended for another year and the government is investing €430 million extra in the tech industry. Major cuts in spending on public transport have also been scrapped.

The caretaker government’s budget does not include any major new plans given there is a general election on October 29. The government collapsed this summer, and just the pro-countryside BBB and the right-wing Liberal VVD remain in office.

They can only be sure of the support of 32 of the 150 MPs in the lower house of parliament.

A recent poll by RTL put public faith in the government at just 4%.